MANAGING THE EQUITY DYNAMICSRahul Kapoor and Vijay Menon were excited about their first job offer from a leading multinational company, Finolex Business Solutions, a UK-based consultancy offering business development and improvement solutions to organizations in a wide range of industries. Kapoor and Menon had just passed out from a prestigious business school with a Masters degree in business administration. Both were bright students and Menon had been a topper all through in college. As students, Kapoor and Menon had always dreamt of working for a multinational company like Finolex. Their dream finally came true when they received a call from them. Having topped the written test and the personality interview, both were offered the position of business development executives in the company. Their job responsibility was to tap potential clients from the corporate world. This seemed to be an ideal break for them as they were keen on getting a job that offered wide exposure to the business environment. The job was a challenging one but it also provided adequate opportunities for valuable corporate experience. Besides, the compensation offered was also at par with the best in the industry. The first few months at Finolex were a learning experience for both of them. Kapoor and Menon were extremely enthusiastic about their jobs. The company had given them adequate training and reasonable autonomy to perform their job. They soon began handling clients independently. They were involved in getting new clients and were also responsible for maintaining smooth relationships with them. Both of them reported to the regional sales manager, Nitish Bajaj. Of the two, Bajaj was more impressed with Menon's performance. Within a couple of months of joining the company. Menon had obtained and closed a deal with a very high profile client. Business with this client was expected to rage in huge profits for the company. After both of them had completed a year of working in the company, the time for their performance review came up. The company had a yearly performance appraisal system which rated employees on the basis of their performance throughout the year Based on these ratings; the employees were paid hefty performance bonuses that served as effective motivators for its employees. However. The yearly performance appraisal brought with it a rather unpleasant surprise for Menon.

Menon had hoped to receive a handsome bonus as an outcome of her performance review. He was aware that he would be appraised by Bajaj who had expressed appreciation for his good performance and announced a cash award for him within a few months of his joining the company. Meridian, however, did not have a transparent policy regarding appraisals and remuneration paid to employees. So. The outcome of the appraisal was not immediately known to anyone but the employees themselves. It was only in course of time that details about the rewards could be gathered informally. In Menon's case, it took a while for him to know the outcome of his colleague, Kapoor's appraisal. And what he heard shocked him. Kapoor had been given a bonus much higher than what he had been given. It came as a surprise not only to Menon, but to the rest of the employees as well that Kapoor had been rated higher than Menon, since everyone in the company knew that Menon was better at the job than Kapoor. The performance bonus thus, served as a demotivating factor for Menon as he began to feel that he deserved much more than what he had got. Menon’s demotivation was evident from him subsequent performance on the job. He stopped working as enthusiastically as he did earlier and was content with doing just the bare minimum required for his job. This change in attitude took place as he obviously fell that there was no point working so hard when he wasn't being recognized for doing a good job. On comparing the efforts he had put into the job and the reward he had received, with the efforts put in by...

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